Union Budget 2015 16 a Snapshot

7/26/2019 Union Budget 2015 16 a Snapshot

1/43

1

UNION

BUDGET2015-16A Snapshot

An elephant moves slow ly

sur ely. Even our worst cr i

would admi t t hat w e have mo

rapidly. I think I have clea

outl ined not only what we

going t o do immediat ely, but a

a r oadmap for t he futu r e.

ARUN JAITL

MINISTER OF FINAN

GOVERNMENT OF IN

Dewan P. N. Chopra & C

INDIA READY TO FLY

.ONCE AGAIN


2/43

2

INDEX

Economic Performance 14-15

Fiscal Summary

Sectoral Highlights

Direct Taxation

Individual Taxation

Firms, Co-operative Societies, Local AuthoritiesTaxation

Corporate Taxation

Make in India

Measure to Curb Black Money

Minimum Government Maximum Governance

Tax Benefit for Swachh Bharat Initiative

REITs and IITs

Chapter-XII-FB

Charitable Trust

Rationization of provision relating to TDS on Interest

Other Significant Amendments

Indirect Taxation

Customs

Central Excise

Service Tax

GST

Disclaimer

3

5

1

1

1

1

1

11

11

11

12

2

2

23

4

4

wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


3/43

3

EC O N O M IC PERFO RM A N C E

FY 14 - 15

an P.N.

pra & Co.

g

5

ASnapshot

GROSS DOMESTIC PRODUCT (GDP)

After inheriting an economy with sentiments of

doom and gloom with adverse macroeconomic

indicators, nine months have seen at turn around

making India fastest growing large economy in

the World with a real GDP growth expected to be

8.4% (New Series)

Macro-economic stability and conditions for

sustainable poverty alleviation, job creation and

durable double digit economic growth have beenachieved.

However, with expectation of better performance

in manufacturing, improved balance of payments

situation and modest global growth revival, the

GDP is expected to grow between 8.0-8.5% in

2015-16.

Clar it y on GAAR deferment for tw o year

no r etr ospecti ve applicabili ty, compr ehe

bankr upt cy code, aboli shing w ealth t ax

mer ger of FMC wi th SEBI, r ati onali zati

corpor ate tax from 30% to 25% coupled

r eview of deducti ons, etc. suppor ts "ma

Indi a" Campai gn.

GAUTAM A

CHAIRMAN,ADANI G

Alt hough n o budget can be perf ect , thi s is

a very positive one. The reduction in

corpor ate tax fr om 30% t o 25% over a

four year s per iod i s ver y appr eaciabl e.Prima facie I can say, in this budget

what ever i s done is ver y good.

RAHUL BAJAJ,

CHAIRMAN, BAJAJ GROUP

5.1

6.97.4

8.4

0

1

2

3

4

5

6

7

8

9

2012-13 2013-14 2014-15 2015-16 E

Growth in GDP(in %)

GDP


4/43

4

INFLATION

After remaining high for a prolonged period,

inflation is finally trending down.

Average Wholesale Price Index Inflation decline

to 3.4% in FY 2014 -2015 as compared to an

average of 6% in FY 2013-2014. Consumer Price Index reached at 5.1 % in FY

2014-2015 from 9.7% in FY 2013-2014.

Inflation in housing declined to 8 per cent in

the third quarter of 2014-15, after remaining in

double digits during 2012 and 2013.

Taking note of the sustained moderation in

retail prices, it has signaled easing of the

monetary stance by reducing policy repo rates

by 25 basis points from 8 per cent to 7.75 per

cent on 15 January 2015.

EXPORT/IMPORT

After growing by 4.7 per cent in 2013-14,

Indias merchandise exports growth moderated

to 2.4 per cent to reach US$ 265 billion in

2014-15 (April-January).

During 2013-14, Indias merchandise imports

contracted by 8.3 per cent to US$ 450.2 billion.In 2014-15 (April-January), imports grew by 2.2

per cent to US$ 383.4 billion as compared to

US$ 375.3 billion in 2013-14 (April-January).

After crossing US $ 300 billion in 2011-12,

there has been significant deceleration in

growth rates of exports which is somewhat a

global phenomenon as global trade volumes

have not picked up significantly since the 2011

Euro zone crisis.

The value of petroleum, oil, and lubricants

(POL) imports, which accounted for 36.6 percent of Indias total imports in 2013-

14,declined by 7.9 per cent in 2014-15 (April-

January) as a result of decline in the price of

international crude petroleumproducts.

-1.8

4.7

4

0.3

-8.3

3.6

-10

-8

-6

-4

-2

0

2

4

6

2012-13 2013-14 2014-15

Export/Import(Growth in %)

an P.N.

ra & Co.

g

5

ASnapshot

7.4

6

3.4

10.29.7

5.1

0

2

4

6

8

10

12

2012-13 2013-14 2014-15

Inflation Index(in %)

WPI CPI


5/43

5an P.N.

pra & Co.

g

5

ASnapshot

FISCAL DEFICIT

Fiscal deficit for 2015-16 is targeted to be limited to 3.9% of the GDP.

The growth of the economy is targeted between 7-8% over the next 3-4 Years.

The journey for fiscal deficit target of 3% will be achieved in 3 years & the fiscal deficit targets

are 3.9%, 3.5% & 3%in FY 15-16,16-17 & 17-18 respectively.

I

s.

illi

4.8

5.7

4.94.5

4.1 3.93.5

3

3.2

4.4

3.63.2

2.9

1.8

2.7

1.81.2

0.80

1

2

3

4

5

6

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 E 2016-17 E 2017-18 E

Gross Fiscal Deficit Revenue Deficit Primary Deficit


6/43

6wan P.N.

opra & Co.

UnionBudget2015

-16

ASnapshot

Co-Operative Federalism

Keeping with the true spirit of Co-0perative Federalism, a 42% share of the divisible pool of

taxes to states.

The devolution to the states would be 5.24 lakh crore in 2015-16 as against the devolution

of 3.38 lakh crore as per revised estimates of 2014-15.

Another 3.04 lakh crore would be transferred by way of grants and plan transfers.

The total transfer to states will be about 62% of the total tax receipts of the country.

I Congr atu lat e FM for doing an excell ent

job in r espect ing aspi r at ions of the Stat es

& at the same tim e deliverin g on National

Priorities.

NARENDRA MODI,

PRIME MINISTER, INDIA


7/43

7

an P.N.

pra & Co.

UnionBudget2015

16

ASnapshot

SEC TO RA L H I G H L IG H TS

AGRICULTURE

Creation of Unified National Agriculture market by working

with states in NITI to increase income of farmers & createplatform to support price stability.

Major steps taken to address the two major factors critical

to agricultural production, that of soil and water are:

Paramparagat Krishi Vikas Yojana to be fully supported

Pradhanmantri Gram Sinchai Yojana to provide Per Drop

More Crop

Rs 5,300 crore to support micro-irrigation, watershed

development and the Pradhan Mantri Krishi Sinchai Yojana.

States urged to chip in.

Rs 25,000 crore in 2015-16 to the corpus of RuralInfrastructure Development Fund (RIDF) set up in NABARD;

Rs 15,000 crore for Long Term Rural Credit Fund; Rs 45,000

crore for Short Term Co-operative Rural Credit Refinance

Fund; and Rs 15,000 crore for Short Term RRB Fund.

Target of Rs 8.5 lakh crore of agricultural credit during the

year 2015-16 to enhance farm credit.

Focus on improving the quality and effectiveness of activities

under MGNREGA by initially allocation of 34,699 crores.

BANKING THE UNBANKED, FUNDING THE UNFUNDED

MUDRA Bank, with a corpus of Rs 20,000 crores, and credit

guarantee corpus of Rs 3,000 crores to be created.

MUDRA Bank will refinance all Micro-finance Institutions

which are in the business of lending to such small entities of

business through a Pradhan Mantri Mudra Yojana.

In lending, priority will be given to SC/ST enterprises

A Trade Receivables discounting System (TReDS) which will

be an electronic platform for facilitating financing of trade

receivables of MSMEs to be established. Comprehensive Bankruptcy Code of global standards to be

brought in fiscal 2015-16 towards ease of doing business.

Postal network with 1,54,000 points of presence spread

across villages to be used for increasing access of the people

to the formal financial system.

NBFCs registered with RBI and having asset size of Rs. 500

crore and above may be considered for notifications as

Financial Institution in terms of the SARFAESI Act 2002


8/43

8an P.N.

pra & Co.

g

5

ASnapshot

FROM JAN DHAN TO JAN SURAKHSA (Wealth For The People

TO Security For The People)

Government to work towards creating a universal social

security system for all Indians, specially the poor and the

under-privileged.

Pradhan Mantri Suraksha Bima Yojna to cover accidental

death risk of Rs 2 Lakh for a premium of just Rs. 12 per year.

Atal Pension Yojana to provide a defined pension, depending

on the contribution and the period of contribution.

Government to contribute 50% of the beneficiaries

premium limited to Rs 1,000 each year, for five years, in the

new accounts opened before 31st December 2015.

Pradhan Mantri Jeevan Jyoti Bima Yojana to cover both

natural and accidental death risk of Rs 2 lakh at premium of

Rs 330 per year for the age group of 18-50.

Unclaimed deposits of about Rs 3,000 crores in the PPF, and

approximately Rs 6,000 crores in the EPF corpus.These

funds will be used to create Senior Citizen welfare fund for

appropriation to a corpus to subsidise premium for groups

such as old pensioners, BPL cardholders,etc.

Government committed to the on-going schemes for welfare

of SCs, STs and Women.

SC Rs. 30,851 crore

ST Rs. 19,980 crore

WOMEN Rs. 79,258 crore

INFRASTRUCTURE

Keeping in mind the pressing need of investment, a sharp

outlay on roads & railways is being increased to Rs. 14,031 &

Rs. 10,050 crore respectively.

The CAPEX of public sector units is expected to increase by

Rs. 80,844 crore over FY 2014-15.

Total investment in infrastructure will go up by Rs. 70,000

crore in FY 2015-16. National Investment and Infrastructure Fund (NIIF), to be

established with an annual flow of Rs. 20,000 crores to it to

be used to raise debt & in turn invest as equity in

infrastructure finance company & further capitalize them &

allow them to leverage the same for development of

infrastructure in India.


9/43

9an P.N.

pra & Co.

UnionBudget2

01516

ASnapshot

Tax free infrastructure bonds for the projects in the rail, road

and irrigation sectors.

PPP mode of infrastructure development to be revisited and

revitalised.

Atal Innovation Mission (AIM) to be established in NITI to

provide Innovation Promotion Platform involving

academicians, and drawing upon national and internationalexperiences to foster a culture of innovation , research and

development. A sum of Rs 150 crore will be earmarked.

(SETU) Self-Employment and Talent Utilization to be

established as Techno-financial, incubation and facilitation

programme to support all aspects of start-up business.

Rs. 1000 crore to be set aside as initial amount in NITI.

An e-base portal is to be launched integrating 14 regulatory

permissions at one source for investor to reduce time on

obtaining multiple permissions An expert committee has

been appointed to examine the possibility and prepare a

draft legislation of the same.

5 new Ultra Mega Power Projects, each of 4000 MW, in the

Plug-and-Play mode. All clearances & linkages will be in place

before the project is awarded by a transparent auction

system.

Ports in public sector will be encouraged to corporatize &

become companies under Companies Act.

FINANCIAL MARKET

Public Debt Management Agency (PDMA) bringing both

external and domestic borrowings under one roof to be set

up this year.

Proposed to merge forward market commission with SEBI to

strengthen regulation of commodity forward markets.

Enabling legislation, amending the Government Securities

Act and the RBI Act included in the Finance Bill, 2015.

All capital A/c transaction under section 6 of FEMA,1999 will

be controlled by the Government in consultation with RBI Government to bring enabling legislation to allow employee

to opt for EPF or New Pension Scheme. For employees

below a certain threshold of monthly income, contribution

to EPF to be option, without affecting employers

contribution.


10/43

10

Overall the budget is growth oriented

and the announcement of schemes like

Mudra Bank and Cashless transactions

through RuPay card will help push the e-

commerce sector towards that growth

trajectory. Further increasing the

purview of the TVoA scheme to 150

countries under different stages, point

towards more tourists inflow in India in

the times to come

VINAY GUPTA, FOUNDER AND CEO,

TRIPFACTORY

an P.N.

pra & Co.

UnionBudget2

01516

ASnapshot

MONETISING GOLD

Gold monetisation scheme to allow the depositors of gold t

earn interest in their metal accounts and the jewellers t

obtain loans in their metal account to be introduced.

Sovereign Gold Bond, as an alternative to purchasing meta

gold scheme to be developed.

Commence work on developing an Indian gold coin, whic

will carry the Ashok Chakra on its face.

Introducing several measures to intensify credit or debit car

transactions to be proposed soon to curb flow of blac

money.

INVESTMENT

Foreign investments in Alternate Investment Funds to b

allowed.

Distinction between different types of foreign investmentespecially between foreign portfolio investments and foreig

direct investments to be done away with. Replacement wit

composite caps. The sectors which are already on a 100%

automatic route would not be affected.

A project development company to facilitate setting u

manufacturing hubs in CMLV countries, namely, Cambodia

Myanmar, Laos and Vietnam through Special Purpos

Vehicles.

SAFE INDIA

To support programmes for women security, advocacy an

awareness Rs. 1000 crores has been provided to th

Nirbhaya Fund.

TOURISM

Resources to be provided to start work along landscap

restoration, signage and interpretation centres, parkingaccess for the differently abled , visitors amenities, includin

securities and toilets, illumination and plans for benefitin

communities around them at various heritage sites.

Visas on arrival to be increased from 43 to 150 countries i

stages.


11/43

11

an P.N.

pra & Co.

g

5

ASnapshot

GREEN INDIA

Target of renewable energy capacity revised to 175000 MW

till 2022, comprising 100000 MW Solar, 60000 MW Wind

10000 MW Biomass and 5000 MW Small Hydro.

A need for procurement law to contain malfeasance i

public procurement.

Proposal to introduce a public Contracts (resolution o

disputes) Bill to streamline the institutional arrangement

for resolution of such disputes.

Proposal to introduce a regulatory reform Bill that will brin

about a cogency of approach across various sectors o

infrastructure.

SKILL INDIA

Less than 5% of our potential work force gets formal ski

training to be employable. A national skill mission t

consolidate skill initiatives spread across several ministries t

be launched.

Deen Dayal Upadhyay Gramin Kaushal Yojana to enhanc

the employability of rural youth.

A Committee for 100th birth celebration of Shri Deen Dayal

Upadhyay to be announced soon.

A student Financial Aid Authority to administer and monito

the front-end all scholarship as well Educational Loa

Schemes, through the Pradhan Mantri Vidya Lakshm

Karyakram.

An IIT to be set up in Karnataka and Indian School of Mine

Dhanbad to be upgraded in to a full-fledged IIT.

New All India Institute of Medical Science (AIIMS) to be se

up in J&K, Punjab, Tamil Nadu, Himachal Pradesh and Assam

Another AIIMS like institutions to be set up in Bihar.

A post graduate institute of Horticulture Research &

Education is to be set up in Amritsar.

3 new National Institute of Pharmaceuticals Education an

Research in Maharashtra, Rajasthan & Chattisgarh and on

institute of Science and Education Research is to be set up i

Nagaland & Orissa each.

The governments comm itment

to gr een Indi a man ifests in some

of t he additi onal measur es such

as in creasing t he coal cess fr om

Rs. 100 to Rs 200 t her eby

pr oviding impetus to clean

energy.

TULSI TANTI ,

CHAIRMAN, SUZLON GROUP


12/43

12an P.N.

pra & Co.

g

5

5

ASnapshot

an P.N.pra & Co.

UnionBudget20151

6

ASnapshot

An autonomous Bank Board Bureau to be set up to improve

the governance of public sector bank. .

Government is committed to comply with all the legal

commitments made to AP & Telengana at the time of their

re-organisation.

Inspite of large increase in devolution to state sufficient

fund allocated to education, health, rural development,

housing, urban development, women and child

development, water resources & cleaning of Ganga.

DIGITAL INDIA

The National Optical Fibre Network Programme (NOFNP) of

7.5 lakh Kms providing networking to 2.5 lakh villages

starting with Andhra Pradesh.

FDI in the area of defense equipments a provision of Rs.

2,46,727 crores for 2015-16. Special assistance to Bihar & West Bengal to be provided as

in the case of Andhra Pradesh.

Part of Delhi-Mumbai Industrial Corridor (DMIC);

Ahmedabad-Dhaulera Investment region and Shendra-Bidkin

Industrial Park are now in a position to start work on basic

infrastructure.

DEFENCE

Buy and the make in India policy are being carefully pursued

to achieve greater self-sufficiency in the area of defense

equipment including air-craft.

As against likely expenditure of 2014-15 Rs. 2,22,370 crore

the budget allocation for 2015-16 is Rs. 2,46,727 crore

It s a development or iented

budget and not a populi st budget .

A welcome shi ft in di r ecti on.

RAJIV LALL,

VICE-CHAIRMAN, IDFC LTD


13/43

13

D I R E C T T A X A T I O N

The direct tax proposals are generally effective from th

financial year beginning on 1.04.2015 except wher

otherwise specified .

Individual Taxation

No change in the slab rate of personal income-tax for A.Y. 2016

17.

Additional Surcharge of 2% over and above 10% on Individua

having income exceeding Rs. 1 crore.

Benefit of deductions as compared to last year.

Section Particular Old limit New limit

80CCC Contribution to Pension

fund.

Rs.1,00,000 Rs.1,50,000

80CCD Contribution to newpension scheme of Central

Govt.

10% ofSalary

Rs.50,000

80D Health Insurance

Premium.

Rs.15,000 Rs.25,000

For Senior Citizen Rs.20,000 Rs.30,000

Medical expenditure of

senior citizen above age of

80 yrs.

-- Rs.30,000

80DDB For senior citizen. Rs.60,000 Rs.80,000

80U Additional deduction for

differently abled persons.

Rs.1,00,000 Rs.1,25,000

Details of Tax benefit to an individual

Particulars New Old

Deduction u/s 80C Rs.1,50,000 Rs.s1,50,000

Deduction u/s 80CCD Rs.50,000 --

Deduction on account ofinterest on house property

loan (Self occupied

property)

Rs.2,00,000 Rs.2,00,000

Deduction u/s 80D on

health Insurance

Rs.25,000 Rs.15,000

Exemption of transport

allowance

Rs.19,200 Rs.9,600

Total Rs.4,44,200 Rs.3,74,600

wan P.N.

pra & Co.

UnionBudget2

015-16

ASnapshot

General Tax Slabs

Income Tax Rate

Up to 2.5 Lacs Nil

Above 2.5 Lacs to 5 Lacs 10%

Above 5 Lacs to 10 Lacs 20%

Above 10 Lacs 30%

Senior Citizen Tax Slabs*

Income Tax Rate

Up to 3 Lacs NilAbove 3 Lacs to 5 Lacs 10%


Above 10 Lacs 30%

Super Senior Citizen Tax Slabs**

Income Tax Rate

Up to 5 Lacs Nil


Above 10 Lacs 30%

*Every individual being resident of India, age 60

years or more but less than 80 years at any time

during the year.

** Every individual being resident of India, age 80

years or more at any time during the year.


14/43

14

D IREC T TA X A TIO N

Firms, Co-operative Societies, Local Authorities

Taxation

The rate of tax for firms, co-operative societies and local

authorities will continue to be same.

Additional Surcharge of 2% over and above 10% on firms, co-

operative societies and local authorities having income

exceeding Rs.1 crore.

Corporate Taxation

Corporate Tax Rates remain unaltered.

Domestic Companies with income exceeding Rs.1 crore to Rs.10

crore to pay surcharge @ 7% and having income exceeding

Rs.10 crore to pay surcharge @ 12%

Proposal to reduce corporate tax from 30% to 25% over the

next four years, starting from next financial year. This will lead

to higher level of investment, higher growth and more jobs.

This process of reduction to be accompanied by rationalisation

and removal of various kinds of tax exemptions and incentives

for corporate taxpayers.

Amendment to the conditions for determining residency statusin respect of Companies . Company shall be said to be resident

in India in any previous year, if-

(i) it is an Indian company; or

(ii) its place of effective management, at any time in that year, is

in India .

Effective Management to mean a place where key management and

commercial decisions that are necessary for the conduct of the

business of an entity as a whole are, in substance made.

Measure to Promote and Improving the Investment

Climate Make in India

Permanent Establishment (PE) norms modified with a view to

facilitate relocation of fund managers of offshore funds in India.

Applicability of GAAR deferred by 2 yearsto be made applicable

from A.Y. 2018-19 and subsequent years prospectively.

wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


15/43

15


Section 80JJAA amended so as to extend the benefit to all

assesses with manufacturing units rather than restricting it to

corporate assesses only. Further, in order to enable the smaller

units to claim incentive, the threshold limit on new regular

workmen has been reduced from 100 to 50.

Insertion of new section 32AD , additional investment allowance

@15% for new manufacturing units set-up during the period

01.04.2015 to 31.03.2020 in notified areas of Andhra Pradesh

and Telangana. This deduction shall be available over and above

the existing deduction available under section 32AC of the Act.Also higher additional depreciation at the rate of 35% (instead of

20%) under section 32(1)(iia) for these areas.

Rate of Tax on Royalty and FTS reduced from 25% to 10% under

the provisions of section 115A .

Additional depreciation on new plant and machinery installed

and used by a manufacturing unit or a unit engaged in generation

and distribution of power for less than 6 months only 10% of the

additional depreciation to be allowed and remaining 10% of the

additional depreciation to be allowed in subsequent year.

Amendment in section 194LD to provide that the concessional

rate of 5% withholding tax on interest payment under the section

will now be available on interest payable upto 30.06.2017 .

(This amendment will take effect from 1st June, 2015.)

Measures to curb black money

Amendment in section 269SS and 269T in order to Prohibitacceptance or re-payment of advance in cash of Rs. 20,000 or

more for any transaction in immovable property .

(The amendment is effective from 1 June 2015.)

wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


16/43

16


Proposals to curb Black Money

Concealment of income and assets and evasion of tax in

relation to foreign assets will be prosecutable with

punishment of rigorous imprisonment upto 10 years. Further,

this offence will be made non-compoundable;

the offenders will not be permitted to approach the

Settlement Commission; and

penalty for such concealment of income and assets at

the rate of 300% of tax shall be levied.

Non filing of return or filing of return with inadequate

disclosure of foreign assets will be liable for prosecution with

punishment of rigorous imprisonment up to 7 years.

Income in relation to any undisclosed foreign asset orundisclosed income from any foreign asset will be taxable at

the maximum marginal rate. Exemptions or deductions which

may otherwise be applicable in such cases, shall not be

allowed.

Beneficial owner or beneficiary of foreign assets will be

mandatorily required to file return, even if there is no taxable

income.

Date of Opening of foreign account would be mandatorily

required to be specified by the assessee in the return of

income. As regards curbing domestic black money, a new and more

comprehensive Benami Transactions (Prohibition) Bill will be

introduced in the current session of the Parliament.

Ease of doing Business - Minimum Government and

Maximum Goverance

Wealth-tax replaced with additional surcharge of 2 per cent on

super rich with a taxable income of over Rs.1 crore annually.

Domestic transfer pricing threshold limit increased from Rs.5

crore to Rs.20 crore.

Monetary limit under section 255 for a case to be heard by a

single member bench of ITAT increased from Rs. 5 lakh to Rs.15

lakh.

(This amendment will take effect from 1st day of June, 2015.)

wan P.N.

pra & Co.

UnionBudget2

015-16

ASnapshot


17/43

17


New 158AA so as to provide that no appeal to be filed by the

revenue before ITAT on a question of law which is identical with

question of law arising in his case for any AY and is pending

before the Honble Supreme Court..

(This amendment will take effect from the 1st day of June, 2015.)

CBDT to make rules to provide the procedure for granting relief

or deduction of any income-tax paid in any country or specified

territory outside India, under section 90, or under section 90A, or

under section 91, against the income-tax payable under the Act.


Clarity regarding source rule in respect of interest received by the

non-resident in certain cases.

Amendment in the provisions of the Income-tax Act so as to

provide tax neutrality on transfer of units of a scheme of a

Mutual Fund under the process of consolidation of schemes of

Mutual Funds as per SEBI Regulations, 1996.

No MAT on capital gains derived by way of transfer of securities

by FII

Tax Benefit for Swachh Bharat Initiatives.

Amendment in section 10(23C) of the Act so as to exempt the

income of Swachh Bharat Kosh and Clean Ganga Fund from

income-tax.

Donations made to the Swachh Bharat Kosh and Clean GangaFund will be eligible for a deduction of 100% per cent from the

total income.

Real Estate Infrastructure Trusts(REITs) and

Infrastructure Investment Trusts (InvITs)

For REITs and Infrastructure Investment Trusts , the sponsor will

be given the same treatment on offloading of units at the time of

listing as would have been available to him if he had offloadedhis shareholding of special purpose vehicle (SPV) at the stage of

direct listing.

The rental income arising from real estate assets directly held by

the REIT to be allowed to pass through and to be taxed in the

hands of the unit holders of the REIT.

wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot

`


18/43

18


New Tax Regime for taxation of income of Investment

Funds and the investors therein [Chapter XII-FB]

A special Tax Regime has been introduced for taxation of income

of Category I and II -Alternative Investment Funds(AIF) which

invest in start ups, SMEs, infrastructure and other economically

and socially desirable sectors

The AIF can be set up as a Trust, Company, Limited liabilty

partnership and any other body corporate.

The AIFs have been accorded the pass through status and the

income earned by the unit holder out of investments made in the

said AIF shall be taxed in his hands directly.

Any income earned by the AIF, other than income from Business

and Profession, is exempt from tax . AIF is liable to pay tax on

such Business income at the normal rate of taxation as may be

applicable.

The income earned by the unit holders by virtue of investment in

the fund shall be deemed to be of the same nature as It had been

received or had accrued or arisen to the investment fund.

AIF shall withhold income tax at the rate of 10% on any income

payable to the unit holder. However, the income received by AIF

would be exempt from TDS.

Any loss arising to AIF shall not be passed through the unit

holders and shall be carried forward to be set-off against income

of the next year in accordance with Chapter VI of the Income Tax

Act, 1961.

The provisions relating to Dividend Distribution Tax or Tax on

Distributed income shall not apply to AIF.

It would be mandatory for AIF to file its return of Income, as may

be prescribed.

wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


19/43

19wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


Charitable Trust

Amendment to section 2(15) of the Income-tax Act so as to

include yoga as a specific category of activity in the definition of

charitable purpose .

Third proviso to Section 2(15) has been inserted to provide that

any activity in the nature of trade, commerce or business or

rendering any service in relation thereto shall not be regarded

advancement of any other object of general public utility unless:

a) Such activity is undertaken in the course of such

advancement of any other object of general public utility

and,b)

The aggregate receipt from such activity, do not exceed 20%

of total receipts of the trust and the institution.

Section 11(2) has been substituted to provide that an assessee is

required to submit the declaration in Form 10 for accumulation

of income to be applied for charitable purpose in subsequent

years on or before the due date of filing of return of income

specified u/s 139(I)

Rationalization of provisions relating to deduction of taxon Interest( other than interest on security)

The definition of time deposits widened so as to include

recurring deposits within its scope for the purposes of deduction

of tax under section 194A of the Act.

Amendment in provisions of section 194A(3)(ix) , deduction of

tax under section 194A from interest payment on the

compensation amount awarded by the Motor Accident Claim

Tribunal compensation shall be made only at the time of

payment, if the amount of such payment or aggregate amount ofsuch payments during a financial year exceeds Rs.50,000/-.

Amendment in provisions of the section 194A exemption

provided from deduction of tax from payment of interest to

members by a co-operative society under section 194A(3)(v) ) of

the Act shall not apply to the payment of interest on time

deposits by the co-operative banks to its members.


20/43

20wan P.N.

opra & Co.

UnionBudget2015-16

ASnapshot


Other Significant Amendments

No requirement in requirement of obtaining TAN by theindividual or HUF who is required to deduct tax on acquisition of

immovable property from a non-resident.

The word belongs to has been deleted in section 153C and

substituted with relates to.


The meaning of the term "substantially" in explanation 5 to

section 9, clarified. For the purpose of taxing indirect transfers it

has been proposed that value of assets situated in India shal

exceed Rs. 10 crore and should comprise of at least 50% of the

value of total assets of the company as on the valuation date.

Insertion of Explaination 2 in section 263 so as to provide clarity

on the issue that an order passed by the A.O. shall be deemed to

be erroneous in so far as it is prejudicial to the interests of the

revenue, if, in the opinion of the Principal Commissioner or

Commissioner,

(a) the order is passed without making inquiries or verification

which, should have been made;

(b) the order is passed allowing any relief without inquiring intothe claim;

(c) the order has not been made in accordance with any order,

direction or instruction issued by the Board under section 119; or

(d) the order has not been passed in accordance with any

decision, prejudicial to the assessee, rendered by the

jurisdictional High Court or Supreme Court in the case of the

assessee or any other person.


An auditor who is not eligible to be appointed as an auditor

under Companies Act, 2013 shall not be eligible for carrying out

audit in respect of corporate assesses under Income Tax Act.

No MAT on share of income received by a Company-member

from AOP/ BOI if such AOP/BOI is chargeable to tax at maximum

marginal rate.


21/43

21wan P.N.

opra & Co.

UnionBudget2015-16

ASnapshot


Section 192 has been amended to provide that the person

responsible for making the payment shall for the purpose ofestimating income of the assessee, or computing tax

deductible, obtain from the assessee the evidence of proof or

particulars of prescribed claims declared by the assessee.

It is now proposed to amend the provisions of section 200A of

the Act so as to enable computation of fee payable under

section 234E of the Act at the time of processing of TDS

statement under section 200A of the Act.

Notice under section 148 can be issued by an AO after expiry o

four years only after obtaining sanction from Principal Chief o

Chief Commissioner or Principal Commissioner o

Commissioner and In all other cases notice under section 148can be issued by an AO who is below the rank of Joint

Commissioner only after obtaining sanction from Joint

Commissioner.


Amendment in section 115ACA definition of GDR to cove

resident employee-investor as well.Current provision extends

benefits to only non-resident employees. Further, only GDRs

issued by the listed companies are covered for benefit unde

the provisions of Section 115ACA.

Where a reassessment notice is issued for any assessment yearthe assessee can approach the Settlement Commission for

other assessment years as well even if reassessment notice has

not been issued for such other assessment years provided the

return of income has been furnished by the assesse for such

years.

Failure to furnish information required u/s 195(6) ; or furnishing

of inaccurate information will attract penalty of Rs.1 lac unde

new section 271-I.


The Indian entity is obligated to furnish, information relating to

the transaction having the effect of directly or indirectly

modifying the ownership structure or control of the Indian

entity. Section 271GA inserted to provide for penalty to the

tune of 2% of the value of transaction or Rs.5,00,000, as the

case may be, in the event of failure to furnish such information

or document by the Indian entity.


22/43

22

wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot

IN D IREC T TA X A TIO N

CUSTOMS

Taxation Rates

No change in the peak rate of Basic Custom Duty (BCD) of 10 %for FY 15-16.

Education cess and secondary and higher education cess

continues to be levied on Customs duty.

Sectoral Changes

Chemi cal and Pet r ochemi cals

Basic Customs Duty on ulexite ore reduced from 2.5% to Nil.

Basic Customs Duty on ethylene dichloride (EDC), vinyl chloride

monomer (VCM) and styrene monomer (SM) reduced from 2.5%to 2%.

Basic Customs Duty on butyl acrylate reduced from 7.5% to 5%.

Basic Customs Duty on anthraquinone reduced from 7.5% to

2.5%.

Basic Customs Duty on antimony metal and antimony waste and

scrap reduced from 5% to 2.5%.

SAD on naphtha, ethylene dichloride (EDC), vinyl chloride

monomer (VCM) and styrene monomer (SM) for manufacture of

excisable goods reduced from 4% to 2%.

Or es & Metals

Export duty on upgraded ilmenite reduced from 5% to 2.5%.

Basic Customs Duty on metallurgical coke increased from 2.5% to

5%.

SAD on melting scrap of iron & steel including stainless steel

scrap for melting, copper scrap, brass scrap and aluminium scrap

reduced from 4% to 2%.

The tariff rate of basic customs duty on iron and steel and articles

of iron or steel retained at 10%.

Electr onics/ Hardwar e

All goods (except populated circuit boards) used in manufacture

of ITA Bound items fully exempt from SAD, subject to actual user

condition.

Basic Customs Duty on metal parts for use in the manufacture

of electrical insulators reduced from 10% to 7.5%, subject to

actual user condition.

UnionBudget2

015-16

ASnapshot

CUSTOMS

Taxation Rates

No change in the peak rate of Basic Custom Duty (BCD) of 10 %for FY 15-16.

Education cess and secondary and higher education cess

continues to be levied on Customs duty.

Sectoral Changes

Chemi cal and Petr ochemical s

Basic Customs Duty on ulexite ore reduced from 2.5% to Nil.

Basic Customs Duty on ethylene dichloride (EDC), vinyl chloride

monomer (VCM) and styrene monomer (SM) reduced from 2.5%to 2%.

Basic Customs Duty on butyl acrylate reduced from 7.5% to 5%.

Basic Customs Duty on anthraquinone reduced from 7.5% to

2.5%.

Basic Customs Duty on antimony metal and antimony waste and

scrap reduced from 5% to 2.5%.

SAD on naphtha, ethylene dichloride (EDC), vinyl chloride

monomer (VCM) and styrene monomer (SM) for manufacture of

excisable goods reduced from 4% to 2%.

Or es & Metals

Export duty on upgraded ilmenite reduced from 5% to 2.5%.

Basic Customs Duty on metallurgical coke increased from 2.5% to

5%.

SAD on melting scrap of iron & steel including stainless steel scrap

for melting, copper scrap, brass scrap and aluminium scrap

reduced from 4% to 2%.

The tariff rate of basic customs duty on iron and steel and articles

of iron or steel retained at 10%.


All goods (except populated circuit boards) used in manufacture

of ITA Bound items fully exempt from SAD, subject to actual user

condition.

Basic Customs Duty on metal parts for use in the manufacture of

electrical insulators reduced from 10% to 7.5%, subject to actual

user condition.


23/43

23

UnionBudget

2015-16

ASnapshot


Basic custom duty on EPDM rubber, water blocking tape & mica

glass tape, for use in manufacture of insulated wires & cables

reduced from 10% to 7.5%, subject to actual user condition.

Basic Customs Duty on magnetron of upto1 KW for use in the

manufacture of domestic microwave ovens reduced from 5% toNil, subject to actual user condition.

Basic Customs Duty on zeolite, ceria zirconiacompounds and

cerium compounds for use in the manufacture of washcoats,

which are used in manufacture of catalytic converters reduced

from 7.5% to 5%, subject to actual user condition.

Basic Customs Duty on specified components for use in the

manufacture of specified CNC lathe machines and machining

centres reduced from 7.5% to 2.5%, subject to actual user

condition.

Basic Custom Duty on C-Block, Over Load Protector, Positive

Thermal co-efficient & Crank Shaft for use in manufacture of

compressor reduced from 7.5% to 5%.

Basic Customs Duty on specified inputs for use in the manufacture

of flexible medical video endoscope reduced from 5% to 2.5%.

Basic Customs Duty on HDPE for use in the manufacture of

telecommunication grade optical fibre cables reduced from 7.5%

to Nil, subject to actual user condition.

Basic Customs Duty on Black Light Unit Module for use in the

manufacture of LCD/LED TV panels reduced from 10% to Nil,

subject to actual user condition.

Basic Customs Duty on Organic LED (OLED) TV panels reduced

from 10% to Nil.

CVD and SAD fully exempted on specified raw materials [battery,

titanium, palladium wire, eutectic wire, silicone resins and

rubbers, solder paste, reed switch, diodes, transistors, capacitors,

controllers, coils (steel), tubing (silicone)] for use in the

manufacture of pacemakers, subject to actual user condition.

SAD on inputs for use in the manufacture of LED drivers and

MCPCB for LED lights, fixtures and lamps fully exempted, subject

to actual user condition.

Basic Customs Duty on Digital Still Image Video Camera capable of

recording video with minimum resolution of 800x600 pixels, at

minimum 23 frames per second, for at least 30 minutes in a single

sequence, using the maximum storage (including the expanded)

capacity and parts and components for use in the manufacture of

such cameras reduced to Nil.


24/43

24

UnionBudget2

015-16

ASnapshot


Fertilisers

Basic custom duty on sulphuric acid for the manufacture of

fertilizers reduced from 7.5% to 5%.

Renewable Energy

Basic custom duty fully exempted on Evacuated Tubes with three

layers of solar selective coating for use in the manufacture of

solar water heater & system, subject to actual user condition.

Basic custom duty on Active Energy Controller (AEC) for use in

the manufacture of Renewable Power System (RPS) Invertors

reduced to 5%, subject to certification by MNRE.

Health

Basic Custom Duty & CVD fully exempted on artificial heart.

Automobile

Basic customs duty on motor vehicles for transport of 10 or more

person (non CKD) and motor vehicle for transport of goods (non

CKD) increased from 10% to 20%.

BCD on following goods retained at 10%:-

Motor vehicles for transport of 10 or more persons

imported in a CKD condition

Motor vehicles for transport of goods imported in CKD

condition

Electrically operated vehicle (including in CKD condition)

for transport of 10 or more persons

Concessional BCD rate benefit on import of specified goods for

use in manufacture of electrically operated and hybrid motor

vehicle extended till 1 April 2016.

Infrastructure

Increase in Additional Duty of Customs (Road Cess) on followinggoods

Description of Goods Upto 28

February 2015

From 1 March

2015

Motor Spirit Rs.2 per litre Rs.6 per litre

High Speed Diesel Oil Rs.2 per litre Rs.6 per litre


25/43

25


UnionBudget2015-16

ASnapshot

Oth er Signi fi cant Pr ovisions

Section 28 is being amended so as to:

(i) Insert a proviso in sub-section (2) thereof to provide that in

cases not involving fraud or collusion or wilful mis-statement or

suppression of facts or contravention of any provision of the Act

or rules with the intent to evade payment of duty, no penalty

shall be imposed if the amount of duty along with interest

leviable under section 28AA or the amount of interest, as the

case may be, as specified in the notice, is paid in full within 30

days from the date of receipt of the notice and the proceedings

in respect of such person or other persons to whom the notice is

served shall be deemed to be concluded;

(ii) Provide that in cases involving fraud or collusion or wilful mis-

statement or suppression of facts or contravention of any

provision of the Act or rules with the intent to evade payment of

duty, the amount of penalty payable shall be 15% instead of the

present 25%;

(iii) Insert Explanation 3 to provide that where a notice under

clause (a) of sub-section (1) or sub-section (4) of section 28, as

the case may be, has been served but an order determining duty

under sub-section (8) has not been passed before the date on

which the Finance Bill, 2015 receives the assent of the President,

then, without prejudice to the provisions of sections 135, 135A

and 140, as may be applicable, the proceedings in respect of such

person or other persons to whom the notice is served shall be

deemed to be concluded if the payment of duty, interest and

penalty under the proviso to sub-section (2) or under sub-section

(5), as the case may be, is made in full within 30 days from the

date on which such assent is received.

Section 112 provides for penalty for improper importation of

goods, etc. Section 112 is being amended to provide that any

person who acquires possession of or is in any way concerned

with or in any other manner deals with any dutiable goods, other

than prohibited goods, which he knows or has reasons to believe

are liable to confiscation under section 111, shall, subject to the

provisions of section 114A, be liable to a penalty not exceeding

10% of the duty sought to be evaded of Rs. 5000, whichever is

greater. It is also being provided that in cases of short levy or

non-levy or short payment or non-payment and erroneous

refund of duty for reasons of collusion or any willful

misstatement or suppression of facts, if the duty as determined


26/43

26


UnionBudget2015-16

ASnapshot

The above benefit of reduced penalty would also be available

where the order confirming the demand is not passed till

enactment of Finance Bill, 2015 and the duty, interest and penalty

(if applicable) is paid within thirty days from such enactment .

Penalty in respect of improper importation or exportation of

goods liable for confiscation will be as under: -

a) 10% of duty involved or Rs.5,000, whichever is higher

b) Penalty to be restricted to 25% of such penalty so

determined, if the duty along with interest is paid

within thirty days of communication of order

Provisions relating to Settlement Commission not applicable to

any proceeding referred back to adjudicating authority by any

court, Appellate Tribunal or any other authority for fresh

adjudication.

Advance Ruling option extended to resident firms (to include

partnership firms, sole proprietorships and one person

companies)- (effective from 01stMarch, 2015).

Changes in Customs Tar iff Act , 1975

Tariff rate of BCD on bituminous coal revised from 55% to 10%

with effect from 01st

March 2015

Mi scellaneous Chan ges

Offence of making false declaration/ documents under Customs

will be treated as a scheduled offence under the Prevention of

Money Laundering Act, 2002. This change wil l be effect ive from

the date of enactment of t he Finance Bill, 2015.


27/43

27


UnionBudget2015-16

ASnapshot

CENTRAL EXCISE

Highlights of Taxation Rates [effective from 01st

Mar., 2015]

Exemption of Education Cess and Secondary & Higher EducationCess (SHE) on all Excisable Goods: As part of the movement

towards GST, Education Cess and Secondary & Higher Education

Cess leviable on excisable goods are subsumed in Basic Excise

duty.

Change in Ad Valorem rate of Excise Duty:

The standard ad valorem rate of Basic Excise Duty (i.e.

CENVAT) increased from 12% to 12.5%.

The total incidence of duties of excise on petrol and diesel

remains unchanged. Other Basic Excise Duty rates (ad valorem as well as

specific) with a few exceptions have not been changed.

Some changes have also been made to excise levy on

cigarettes and the compounded levy scheme applicable to

pan masala, gutkha and certain other tobacco

products(other than biris).

Rate of Excise Duty increased for goods covered by the Medicinal

and Toilet Preparations Act, 1955 increased from 12% to 12.5%

ad valorem.

Sectoral Changes [effective from 01stMar., 2015]

Petroleum

The Schedule Rates of the Additional Duty of Excise (commonly

known as Road Cess) levied on Petrol and High Speed Diesel Oilis

being increased from Rs.2 per litre to Rs.8 per litre. The effective

rates of the Additional Duty of Excise (commonly known as Road

Cess) levied on Petrol and High Speed Diesel Oil increased from

Rs.2 per litre to Rs.6 per litre only

Education Cess and Secondary and Higher Education Cess,

presently applicable to petroleum products, including petrol and

High Speed Diesel exempted.


28/43

28

UnionBudget2015-16

ASnapshot


Rates of duty of excise (CENVAT) on Petrol and High Speed

Diesel Oil (both branded and unbranded) are also revised.

Food Processing Sector

Mechanism for valuation of following products has been

shifted from transaction value based to RSP based: -

Condensed milk put up in unit containers with an

abatement @ 30%

All goods covered under Central Excise Tariff

Heading 210120 such as extracts, essences or

concentrates of tea or mate and preparations with a

basis of these goods including iced tea with an

abatement @ 30%

Waters containing added sugar or other sweetening

matter of flavored and other non-alcoholicbeverages except mineral water and aerated drinks

with an abatement @ 35%.

Excise Duty of 2% without Cenvat credit or 6% with Cenvat

credit has been levied on condensed milk put up in unit

containers.

Excise Duty of 2% without Cenvat credit or 6% with Cenvat

credit has been levied on peanut butter.

Automobiles

Excise duty on chassis for ambulances has been reduced

from 24% to 12.5%;

Concessional excise duty of 6% granted to specified goods

used in manufacturing electrically operated vehicles and

hybrid vehicles has been extended upto 31 March 2016.

Health

Excise Duty on cigarettes has been increased by 25% for

cigarettes of length not exceeding 65 mm and by 15% for

cigarettes of other lengths. Similar increases are proposed

on cigars, cheroots and cigarillos;

Maximum speed of packing machine is being specified as a

factor relevant to production for determining Excise Duty

payable under the Compounded Levy Scheme,as presently

applicable to pan masala, gutkha and chewing tobacco.


29/43

29


UnionBudget2

015-16

ASnapshot

Excise duty on cut tobacco increased from Rs. 60 per kg to

Rs. 70 per kg.


Excise duty on Wafers for use in the manufacture of

integrated circuit (IC) modules for smart cards has been

reduced from 12% to 6%;

Excise duty on Inputs for use in the manufacture of LED

drivers and MCPCB for LED lights, fixtures and LED lamps

has been reduced from 12% to 6%;

Excise duty on Mobiles handsets, including cellular phones

from 1% without Cenvat credit or 6% with Cenvat credit to

1% without Cenvat credit or 12.5% with Cenvat credit.

NCCD of 1% on mobile handsets including cellular phones

remains unchanged; Excise duty on Tablet computers from 12% to 2% without

Cenvat credit or 12.5% with Cenvat credit;

Excise duty on Specified raw materials [battery, titanium,

palladium wire, eutectic wire, silicone resins and rubbers,

solder paste, reed switch, diodes, transistors, capacitors,

controllers, coils (steel), tubing (silicone)] for use in the

manufacture of pacemakers to Nil;

Mechanism for valuation of LED lights or fixtures including

LED lamps with abatement @ 35% has been shifted from

transaction value based to RSP based.

Renewable Energy

Accordingly, deemed production and duty payable per Excise

duty on Pig iron SG grade and Ferro-silicon magnesium for

use in the manufacture of cast components of wind operated

electricity generators to Nil, subject to certification by MNRE;

Excise duty on Solar water heater and system from 12% to Nil

without Cenvat credit or 12.5% with Cenvat credit.

Excise duty on Round copper wire and tin alloys for use in the

manufacture of Solar PV ribbon for manufacture of solar PV

cells to Nil subject to certification by Department ofElectronics and Information Technology (DEIT).

Consumer Goods

Excise Duty on leather footwear (footwear with uppers

made of leather of heading 4107 or 4112 to 4114) of Retail

Sale Price of more than Rs. 1000 per pair has been reduced

from 12% to 6%.


30/43

30

UnionBudget2015-16

ASnapshot


Percentage abatement prescribed for RSP based valuation of

all footwear falling under Chapter 64 of Central Excise Tariff

has been changed from 35% to 25%.

Mechanism for valuation of Waters containing added sugar or

other sweetening matter of flavored and other non-alcoholic

beverages except mineral water and aerated drinks with an

abatement @ 35% has been shifted from transaction value

based to RSP based.

Additional duty of excise levied on waters, including aerated

waters, containing added sugar abolished.

The Basic Excise Duty on Waters including mineral waters and

aerated waters, containing added sugar or other sweetening

matter or flavouredhas been increased from 12% to 18%.

Swachh Bhar at a nd Ener gy Sector

Effective rate of Clean Energy Cess has been increased from

Rs.. 100 per tonne to Rs. 200 per tonne.

Education Cess and Secondary and Higher Education Cess

levied on Clean Energy Cess are exempted.

Excise Duty on sacks and bags of polymers of ethylene other

than for industrial use is being increased from 12% to 15%.

Miscellaneous

Full exemption from Excise Duty extended to captively

consumed intermediate compound coming into existence

during the manufacture of Agarbattis. Agarbattis attract Nil

Excise Duty.

Rate of duty on cement changed as below:

Mini cement plant: 6 per cent + Rs.125 per MT (earlier 6

per cent+120 per MT).

Other than from mini cement plant: 12.5 per cent + Rs.125

per MT (earlier 12 per cent +120 per MT).

Cement other than those cleared in packaged: 12.5 per

cent (earlier 12 per cent).

Goods falling under Central Excise Tariff Heading 252329 such

as Ordinary Portland cement, dry or colored, Portland

pozzolana cement or slag cement has been increased Rs.900

per tonne to Rs. 1,000 per tonne


31/43

31

UnionBudget2

015-16

ASnapshot


Amendment i n t he Centr al Excise Act , 1944

Following changes are proposed in the Central Excise Act, 1944

and will be effective from the date of enactment of the FinanceBill, 2015.

Provision relating to recovery of duties: -

Special treatment of cases where there is existence of fraud,

collusion, etc. but the transactions are recorded in the

specified records has been dispensed with;

Relevant date for invoking extended period of limitation

where return has been filed would be the date when the

return has been filed and not the due date of filing return;

Relevant date for invoking extended period of limitation

where only interest is recoverable, has been prescribed to be

date of payment of duty to which such interest relates;

The provision related to recovery of duty is proposed to be

made inapplicable where duty amount in dispute is shown as

payable in the periodic returns filed by the assessee. The

manner in which recovery of disputed duty would be made in

such cases will be prescribed.

Penalty provisions pertaining to fraud, collusion etc.

Particulars Fraud Case Other than fraud

case

Duty as determined

under sub-section (10)

of section 11A of the

Excise Act

Penalty would be

leviable equal to

duty so determined

in the order.

However in respect

of period 8-4-2011

to the date of the

assent to the dutyso determined

Penalty would be

higher of the two:

- 10% of the Duty

determined under

Section 11A(10) of

the Excise Act; or

Rs. 5000


32/43

32

UnionBudget2015-16

ASnapshot


Duty and interest

payable thereon

under section

11AA

Where duty and

interest thereon paid

within 30 days of

communication of

show cause notice,the amount of penalty

would be leviable 15%

of the duty

demanded.

Subject to the

condition that the

reduced penalty

would also be paid

within 30 days of

communication of

show cause notice

No penalty would b

leviable where th

duty and intere

paid on or befo

the issuance oShow Cause Notic

(the SCN) o

within 30 days o

the SCN

Duty as

determined

under sub-section

(10) of section

11A of the Excise

Act and interest

payable thereon

under section

11AA the Excise

Act paid within 30

days of the date

of

communication

of order of the

Central Excise

Officer.

Penalty would be

reduced to 25% of the

penalty imposed in

the order.

Provided further that

such reduced penalty

is also paid within 30

days of the

communication of

such order.

Penalty would b

reduced to 25% o

the penalty impose

in the order.

Provided furthe

that such reduce

penalty is also pa

within 30 days o

the communicatio

of such order.

Proceedings in

the pending show

cause notices canbe closed

On payment of duty,

interest and penalty

at the rate of 15% ofthe duty within 30

days of the

enactment of the

Finance Bill, 2015.

On payment of du

and interest with

30 days of thenactment of th

Finance Bill, 2015.

We welcome Ini t ia t ives on ease

of doing busin ess, Enhancing t he

global competi ti veness of th e

Indian industr y, Skil l

development for cr eating

empl oyment i n r ur al sector s

mom, rat ionalization of taxes for

GST roll out & enhancing socia l

secur it y. wi ll be a mar ginal

in crease of basic dut ies. The

servi ce tax in crease is not

expected t o have much im pact on

manufactur ing, since ther e is a

facil it y to offset i t ..

RAHUL BAJAJ, CHAIRMAN, BAJAJ

GROUP


33/43

33

UnionBudget2

015-16

ASnapshot


Cases where show

cause notices are

adjudicated after

the enactment of

the Finance Bill,

2015

25% of the reduced

penalty of the duty

provided within 30

days of

communication of

the adjudication

order if the duty,

interest and

penalty is paid

within such time

25% of the penalty

imposed provided

within 30 days of

communication of

the adjudication

order if the duty,

interest and

penalty is paid

within such time

Where in the Appellate preceding the duty amount is

modified by the Appellate Authority in the fraud cases then

the penalty amount also modified accordingly. Subject to

the condition that the additional duty, interest and penalty

would also paid within 30 days of such Appellate Authority.

Cases where no show cause notice has been issued prior to

the date on which Finance Bill, 2015 receives the assent of

the President, shall be governed by the new penal

provisions as elucidated above.

Following changes will be effective from 1 March 2015.

Scheme of Advance Rulings has been extended to resident

firms.

Following products have been either brought under

Schedule III (relating to deemed manufacture) to the

Central Excise Act, 1944 or the existing entries in the said

Schedule have been modified: -

Extracts, essences and concentrates, of tea or mate, and

preparations with a basis of these extracts, essences or

concentrates or with a basis of tea or mate;

Waters, including mineral waters and aerated waters,

containing added sugar or other sweeting matter or

flavoured, and other non-alocholic beverages, not

including fruit or vegetable juices specified in Central

Excise Tariff Heading 2009


34/43

34

UnionBudget2015-16

ASnapshot


All goods falling under Central Excise Tariff Heading 8539

(Electrical filament or discharge lamps, including sealed

beam lamp units and ultra violet or infra-red lamps; arclamps except lamps for automobiles), LED lights or fixtures

including LED lamps falling under Chapter 85 or Central

Excise Tariff Heading 9405.

Amendments in the Centr al Excise Rules, 2002

The following changes will be effective from 1 March 2015.

Following provisions of Central Excise Rules, 2002 shall apply

mutatis mutandis to registered importer:

Imposition of restrictions in case of evasion of duty, defaultin payment of duty, irregular availment of CENVAT credit,

etc.

Access to registered premises of importer by Central Excise

officer for scrutiny and verification of records.

Confiscation and penal provisions for contravention of any

provisions of Central Excise Rules, 2002.

Penalty of Rs.100 per day subject to maximum of Rs.20,000

is payable for delay in filing of return including Annual

Financial Information Statement, Annual Installed Capacity

Statement and other returns by Manufacturer or 100% EOU


35/43

35wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


SERVICE TAX

Taxation Rates [Effective Date to be notified by Central

Government]

The service tax rate is increased from 12% to 14%. The Education

Cess and Secondary and Higher Education Cess shall be

subsumed in the new service tax rate.

Review of the Negative List of services [Effective Date

to be notified by Central Government]

Following services shall be removed from the negative list of

services:

a) Service by way of access to amusement facility such as rides

bowling alleys, amusement arcades, water parks, theme parks

or other such places.

b) Service by way of admission to entertainment event of

concerts, non-recognized sporting events, pageants, music

concerts and award functions, if the amount charged for

admission is more than Rs 500 for right to admission of such

an event.

c) Service by way of carrying out any processes as job work for

production or manufacture of alcoholic liquor for human

consumption.d) Services provided by the Government or local authority to a

business entity.

General exemptions [Notification No. 25/2012-ST

dated 20.06.2012]

Exemption will be withdrawn on the following services:

a) Construction, erection, commissioning or installation of origina

works pertaining to an airport or port

b)

Services provided by a mutual fund agent to a mutual fund or

assets management company

c) Services provided by a distributor to a mutual fund or AMC

d) Services provided by a selling or marketing agent of lottery ticket

to a distributor of lottery

e) Departmentally run public telephone


36/43

36wan P.N.

pra & Co.

UnionBudget2

015-16

ASnapshot


f) Guaranteed public telephone operating only local calls

g)

Service by way of making telephone calls from free telephone at

airport and hospital where no bill is issued

h)Service provided by a commission agent located outside India to

an exporter located in India [Applicable with immediate effect]

i) Services provided by a distributor to a mutual fund or AMC

New exemptions

Exemption will be allowed on the following services:

a)

Services of pre-conditioning, pre-cooling, ripening, waxing,

retail packing, labeling of fruits and vegetables

b)

Life insurance service provided by way of Varishtha Pension

Bima Yojna.

c)

Service provided by way of exhibition of movie by the

exhibitor/theatre owner to the distributor or association of

persons consisting of exhibitor as one of its members.

d) All ambulance services provided to patients

e) Service provided by way of admission to a museum, zoo,

national park, wild life sanctuary and a tiger reserve

f) Service provided by a Common Effluent Treatment Plant

operator for treatment of effluent

Other measures relating to Service Tax

Changes in Abatements

The abatement for executive (business/first class) air travel is

reduced from 60% to 40%. Consequently, service tax would be

payable on 60% of the value of fare for business class.

Service Tax shall be payable on 30% of the value of transport

services by road and vessel as against 25% of the value in case of

road transport and 40% in case of transport by vessels.

Abatement is withdrawn on chit fund service


37/43

37wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


Other measures relating to Service Tax

Reverse charge mechanism

Manpower supply and security services when provided by

individual, HUF, partnership firm to a body corporate are being

brought to full reverse charge.

Services provided by mutual fund agents, mutual fund

distributors and lottery agents are being brought to under reverse

charge

Changes in Cenvat Credit Rules,2004:

Cenvat Credit Rules are amended to allow credit of service tax

paid under partial reverse charge by the service receiver without

linking it to the payments of value of service to service provider

as a trade facilitation measure.

Changes In Service Tax Rules

In respect of any service provided under aggregator model, the

aggregator is being made liable to pay service tax if the service is

provided using the brand name of aggregator in any manner.

[Applicable with immediate effect]

The composition rate on specified services, namely, life insurance

service, services of air travel agent, money changing service

provided by banks or authorized dealers, and service provided by

lottery distributor and selling agent, is proposed to be revised

proportionately.

Provision for issuing digitally signed invoices are being added

along with the option of presentation of records in electronic

form. The conditions and procedure in this regard shall be

specified by the CBEC. Rule 6 (6A) which provided for recovery of service tax self-

assessed and declared in the return under section 87 is omitted

consequent to amendment in section 73 for enabling such

recovery.


38/43

38wan P.N.

opra & Co.

UnionBudget2015-16

ASnapshot


Exemption presently available on specified services of

construction, repair of civil structures, etc. when provided to

Government shall be restricted only to:

a) A historical monument, archaeological siteb) Canal, dam or other irrigation work;

c)pipeline, conduit or plant for (i) water supply (ii) water

treatment, or (iii)sewerage treatment or disposal. (Notification

No. 25/2012-ST dated 20.06.2012)

Exemption to services provided by a performing artist in folk or

classical art form of (i) music, or (ii) dance, or (iii) theater, will be

limited only to such cases where amount charged is upto Rs

1,00,000 per performance (except brand ambassador).

(Notification No. 25/2012-ST dated 20.06.2012)

Exemption to transportation of food stuff by rail, or vessels orroad will be limited to transportation of food grains including rice

and pulses, flours, milk and salt only.(Notification No. 25/2012-

ST dated 20.06.2012).

Swachh Bharat Cess [Effective Date to be notified by

Central Government]

The Central Government proposed to imposed a Swachh Bharat

Cess on all or certain taxable services at a rate of 2% on the value

of such taxable services. The proceeds from this Cess would beutilized for Swachh Bharat initiatives.

Exemption to some of the services covered under Negative List

[Notification No. 25/12-ST] [Effective from date of amendment

being made in Negative List]

Services by way of right to admission to:

(i) exhibition of cinematographic film, circus, dance, or

theatrical performances including drama or ballet.

(ii) recognized sporting events.

(iii) concerts, pageants, award functions, musical or sporting

event not covered by the above exemption, where

theconsideration for such admission is upto Rs. 500 per

person.


39/43

39wan P.N.

opra & Co.

UnionBudget2015-16

ASnapshot


Changes in the Finance Act, 1994:

Section 67 of the Act prescribes that a taxable service shall include

any reimbursable cost or expenditure incurred and charged by the

service provider to make legal position clear and avoid disputes.

Section 66F of the Act prescribes that unless otherwise specified,

reference to a service shall not include reference to any input servic

used for providing such service.

Section 73 is being amended in the following manner:

(i) a new sub-section (1B) is inserted to provide that recovery of t

service tax amount self-assessed and declared in the return but n

paid shall be made under section 87, without service of any noti

under sub-section (1) of section 73, and

(ii) sub-section (4A), that provides for reduced penalty if true a

complete details of transaction were available on specified records

being omitted.

Section 76 is being amended to rationalize penalty, in cases n

involving fraud or collusion or wilful mis-statement or suppression

facts or contravention of any provision of the Act or rules with t

intent to evade payment of service tax, in the following manner,-

(i) penalty not to exceed ten per cent of service tax amount involved

such cases;

(ii) no penalty is to be paid if service tax and interest is paid within

days of issuance of notice under section 73 (1);

(iii) a reduced penalty equal to 25% of the penalty imposed by t

Central Excise officer by way of an order is to be paid if the service t

interest and reduced penalty is paid within 30 days of such order; and

(iv) if the service tax amount gets reduced in any appellate proceedi

then penalty amount shall also stand modified accordingly, and bene

of reduced penalty ( 25% of penalty imposed) shall be admissible

service tax, interest and reduced penalty is paid within 30 days of su

appellate order.


40/43

40wan P.N.

opra & Co.

UnionBudget2015-16

ASnapshot


Section 78 is being amended to rationalize penalty, in cases

involving fraud or collusion or wilful mis-statement or suppression

of facts or contravention of any provision of the Act or rules with

the intent to evade payment of service tax, in the following

manner,-

(i) penalty shall be hundred per cent of service tax amount involved

in such cases;

(ii) penalty equal to 15% of the service tax amount is to be paid if

service tax, interest and reduced penalty is paid within 30 days of

service of notice in this regard;

(iii) a reduced penalty equal to 25% of the service tax amount

determined by the Central Excise Officer, by an order, is to be paidif the service tax, interest and reduced penalty is paid within 30

days of such order; and

(iv) if the service tax amount gets reduced in any appellate

proceeding, then penalty amount shall also stand modified

accordingly, and benefit of reduced penalty (25%) shall be

admissible if service tax, interest and reduced penalty is paid within

30 days of such appellate order.

Service shall include services by:

i. chit fund foremen by way of conducting a chit; and

ii. Distributor or selling agent of lottery, as appointed or authorized

by the organizing state for promoting, marketing, distributing,

selling, or assisting the state in any other way for organizing and

conducting a lottery.

A definition of the term government is incorporated in the Act.


41/43

41wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot


Minimum government and maximum governance to

improve the ease of doing business

Compliance Facilitation

Online Central Excise/Service Tax Registration within two working

days.

Time limit for taking CENVAT Credit on inputs and input services is

being increased from six months to one year.

Facility of direct dispatch of goods by registered, dealer from

seller to customers premises is being provided. Similar facility is

also being allowed in respect of job-workers. Registered importe

can also send goods directly to customer from the port of

importation. Penalty provisions in Customs, Central Excise & Service Tax are

being rationalized to encourage compliance and early dispute

resolution.

Central Excise/Service Tax assessees are being allowed to issue

digitally signed invoices and maintain other records electronically.

GST

The statement of Honble Finance Minister, emphasizing

importance of GST for Indian economy and its development, from

his budget speech is reproduced below:

GST is expected to play a transformative role in the way our

economy functions. It will add buoyancy to our economy by

developing a common Indian market and reducing the cascading

effect on the cost of goods and services. We are moving in various

fronts to implement GST from the next year.


42/43

42wan P.N.

opra & Co.

UnionBudget2

015-16

ASnapshot

48 197 225 277 323773 907 1,056

1,476 2,107

5,703

-

2,000

4,000

6,000Volume of Tweets

across Sectors

Source: https://twitter.com/blogworks?refsrc=email&s=11

100%

80%

83%

81%

82%

73%

50%

67%

93%

86%

51%

0%

20%

17%

19%

18%

27%

50%

33%

7%

14%

49%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Housing

Education

Electronics

Infrastruct

ure

Defence

Women

Tobacco

FDI

Health

Energy

Agriculture

Positive Negative

Source: https://twitter.com/blogworks?refsrc=email&s=11

TW ITTERA TI REA C TS


43/43

UnionBudget2015-16

ASnapshot

DISCLAIMER

This document has been prepared in summary form by Dewan P. N. Chopra & Co., Chartered Accountants, from sou

believed to be reliable. The information contained herein is intended only for the person to whom it is sent. While

information is believed to be accurate to the best of our knowledge, we do not make any representations or warran

express or implied, as to the accuracy or completeness of such information. Recipients should conduct and rely upon t

own examination, investigation and analysis and are advised to seek their own professional advice. The information

data contained herein is not a substitute for the recipients independent evaluation and analysis. This document is no

offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain, whe

caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies on it.

CONTACT US

Dewan P. N. Chopra & Co.Chartered Accountants

Head Office Corporate Offices

57-H, Connaught Circus D-295, Defence Colony,

New Delhi (India)-110001 New Delhi (India)-110024

Phones: +91-11-23321418/2359 Phones: +91-11-24645891/92/93

Email: [email protected]

D-203, Defence Colony,

New Delhi (India)-110024

Phones: +91-11-24645897/40526860

C-109, Defence Colony,

New Delhi (India)-110 024

Phones::+91-11-24645895/96

C-09, Defence Colony,

New Delhi (India) 110024

UnionBudget2

015-16

ASnapshot

Union Budget 2015 16 a Snapshot

Documents

Transcript of Union Budget 2015 16 a Snapshot